Natural killer (NK) cells help protect the host against viral infections and tumors. Arguably,the two most important receptors responsible for mediating the effect of NK cells are NKG2D and CD16. NKG2D is a vital activating receptor whose ligands tend to be up-regulated on stressed and/or rapidly proliferating cells, which includes tumor and pathogen infected cells. In vivo tumor transfer studies in mice showed that NKG2D expression on NK cells can mediate tumor clearance and animals treated with NKG2D blocking Ab or lacking NKG2D have been shown to have defective tumor surveillance. On the other hand, expression of soluble NKG2D ligands by human tumors has been shown to promote tumor immune evasion and, in a twist of fate, ectopic expression of NKG2D by some human tumors has been demonstrated to deliver activation signals. There is also ample evidence that NKG2D plays a critical role in regulating many types of viral infections. In the case of T cells, NKG2D co-stimulation can be harmful to the host in that it has been implicated in the pathogenesis of a number of autoimmune diseases. These include celiac disease,Crohns disease, rheumatoid arthritis and diabetes, presumably because the tissue inflammation associated with these diseases leads to the up-regulation of NKG2D ligands. Ligation of NKG2D leads to phosphorylation of the associated DAP10 adaptor protein, thereby activating immune cells. Understanding how the expression of NKG2D-DAP10 is regulated has implications for immunotherapy. We show that IL-2 and TGFbeta-1 oppositely regulate NKG2D-DAP10 expression by NK cells. IL-2 stimulation increases NKG2D surface expression despite a decrease in NKG2D mRNA levels. Stimulation with IL-2 results in a small increase of DAP10 mRNA and a large up-regulation of DAP10 protein synthesis, indicating that IL-2-mediated effects are mostly post-transcriptional. Newly synthesized DAP10 undergoes glycosylation that is required for DAP10 association with NKG2D and stabilization of NKG2D expression. TGFbeta-1 has an opposite and dominant effect to IL-2. TGFbeta-1 treatment decreases DAP10, as its presence inhibits the association of RNA polymerase II with the DAP10 promoter, but not NKG2D mRNA levels. This leads to the down-regulation of DAP10 expression and, as a consequence, NKG2D protein as well. Finally, we show that other common gamma chain cytokines act similarly to IL-2 in up-regulating DAP10 expression and NKG2D-DAP10 surface expression. Another mechanism utilized by NK cells to effect anti-tumor or anti-viral activity is via CD16 mediated antibody dependent cell-mediated cytotoxicity (ADCC).Once CD16 binds to the Fc region of an IgG antibody of the appropriate isotype (IgG1) that is coating a potential target cell, NK cells are triggered to release cytokines, such as interferon (IFN)-gamma and tumor necrosis factor (TNF)-alpha, and/or cytotoxic granules containing perforin and granzymes that enter the target cell and promote its death. We discovered that NK cells cultured and expanded in the presence of IL-2 gradually reduced CD16 expression on the cell surface. The changes only affected protein level as CD16 mRNA was stable during the first three days of culture and started to increase after four days, indicating that the down-modulation of CD16 protein on the cell surface is an active post-translational process. Since MMPs could be involved in CD16 down-modulation, we next investigated the pattern of expression of different MMPs in resting and IL-2 stimulated NK cells. We found that NK cells express both secreted and membrane-type MMPs: MMP-2, MMP-7, MMP-9, MT1-MMP, MT3-MMP and MT6-MMP. Only three of them, however, were up-regulated in response to IL-2. Real-time PCR revealed that, when compared to resting NK cells, NK cells cultured with IL-2 had 2.5-fold increase of MT1-MMP transcripts, MMP2 transcripts increased 3-fold and MT6-MMP increased 7-fold. As MT1 and MT6-MMP aremembrane-bound MMPs, the data suggested that membrane-type MMP could be involved in CD16 down-modulation in NK cells. Indeed, we found that treatment of NK cells with inhibitors of phosphatases (that tends to upregulate membrane-type MMPs) also resulted in CD16 down-modulation, supporting our hypothesis that membrane-type MMPs could be specifically involved in CD16 shedding. In agreement, using confocal microscopy we discovered that exposure to IL-2 results in translocation of MT6-MMP to the cell surface in NK cells. These results indicate that IL-2 mediated relocation of membrane-type MMP (e.g. MT6) could be responsible for the proteolytic removal of CD16 from the cell surface.